Due to the absence of alternative options and rising fuel prices, sanctions will likely cause Russia more damage than good.
By Timur FomenkoA political analyst
This week the European Union announced ambitious plans to block Russian oil imports by 2022. Following teeth-pulling negotiations that were met with strong objections by several member countries, including Hungary, Slovakia and the public doubt about the effect of such measures and after lengthy negotiations, Ursula Von Der Leyden, the President of its Commission, stated that the measures would be implemented gradually over the course of the calendar year.
This didn’t reassure markets, with crude oil prices quickly rising above $114 per barrel as of Friday morning, and Moscow officials predicting that the bloc would still be buying Russian oil via third countries and intermediaries, a strategy that has allegedly been utilized by Iran under tough American sanctions.
The EU will be the largest loser in this effort, despite being marketed as hard. This embargo proposal reveals the EU’s strategic vulnerabilities. “energy security” – the ability of a state, or group of states, to secure access to energy resources when they are not capable of producing enough of their own. It is significant when one considers how many wars were fought solely for access to oil resources, such as the two that took place in Iraq.
For the EU, cutting off oil dependency continues to be a difficult step which will exacerbate already surging energy costs and inflation across the continent. How will the bloc find new supplies? If so, will the bloc rely more on its partners to find new supplies?
In the year 2020, 29% of the EU’s imported crude oil came from Russia, 9% from the US, 8% from Norway, 7% each from Saudi Arabia and the UK, and 6% apiece from Kazakhstan and Nigeria. Russia has been removed as the biggest market and the EU must now increase imports from other countries. Naturally, the natural candidate is Russia. This means the EU’s strategic dependency on continued access to oil resources in the Middle East is drastically increased, raising the bargaining power and political leverage of these countries. All evidence to date points to OPEC nations benefitting from high prices but refusing to comply with Western demands for increased production. Economics is about supply and need. If supply decreases, but demand remains high (given you can’t go without oil) then prices rise, and why would any seller in the world put their prices down when the customer has no alternative to your essential product? Further complicating matters is the fact that Russia is part OPEC+.
This has led to the EU making huge mistakes in its foreign policies and has no strategy or contingency plan to deal with this problem. The bloc wants to use Ukraine in order to impose a Russian military defeat. It has appointed itself an interim president. “Indo-Pacific” power, showing little initiative to avoid being sucked into Washington’s confrontation with China in a region of the world it isn’t based in. This leaves the EU with the option of partnering up with India, but the 1.3-billion-strong nation is a net energy consumer, not a supplier – which is, coincidentally, another reason why attempts to undermine New Delhi’s ties with Moscow are likely to fail.
This all places a gaping hole in the EU’s foreign policy when it comes to strategic “energy security”.You can reduce your carbon footprint by trying. “strategic dependence”Russia: They are not creating any new dependence on Russia.
For example, how is the EU’s disorientated policy on Iran, which has involved a nominal opposition to America’s unilateral “maximum pressure”Are you going to be able to get out of the Iranian nuclear crisis with your program? Is the EU able to avoid having to use Iranian oil? What would happen if Iran becomes more powerful despite the American sanctions? Before we think about what to do if there is another conflict or major crisis in the Middle East that interrupts oil supply, this is just before. How will the EU respond if Iraq is again insurgent and in civil war?
Russia is far too critical a resource in the global energy sector to be overlooked. EU sanctions are not likely to cause a major economic disruption to Russia’s economy. Russia would continue to increase its production if the proposal ban was not phased in.
The EU’s ability to restructure itself in order to satisfy the US interests is a sign of its weakness. This is because the United States has a disproportionate amount of power over the EU’s foreign and strategic policies. Although America does benefit from the energy sanctions placed on Russia, it comes at a higher cost for European consumers. In this case, these sanctions will do more harm to the EU itself than they will to Russia. It will prove to be both economically and strategically devastating. The bloc doesn’t have a concrete alternative in place and what’s worse, it has barely even contemplated such an alternative. It will make the continent more fragile, weaker, and vulnerable.
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